A key performance indicator (KPI)is:
A)a performance measure of profitability
B)a performance measure that is critical for the success of the entity
C)a performance measure used only by manufacturing entities
D)a management performance measure

Question

Quizplus · Accepted Answer

A key performance indicator (KPI) is a performance measure that is critical for the success of the entity. While profitability is certainly an important factor, a KPI can relate to any area of the business that is essential to achieving its goals, such as customer satisfaction, employee engagement, or product quality. KPIs are not limited to manufacturing entities and are widely used in all types of organizations. Although KPIs are often used by management to assess their own performance, they can also be useful for external stakeholders to evaluate the success and efficiency of the organization.

A Key Performance Indicator (KPI)is